Being a business owner may be rewarding but owning a business comes with the responsibility of making sure that the business complies with various obligations. Below are the 7 things business’ are getting caught out on:
- Minimum wages. The current minimum wage is $694.90 per week ($18.29 per hour) and paying employees below that either intentionally or unintentionally can result in penalties.
- Annual Leave. All employees (except for casual employees) are entitled to annual leave. Full-time and part-time employees get 4 weeks of annual leave, based on their ordinary hours of work. The leave accumulates gradually during the year and any unused annual leave will roll over from year to year.
- Superannuation payment. Almost all employees in Australia are entitled to a superannuation contribution, paid by their employer into a super fund. It doesn’t matter if the employee is full time, part time or casual (depending on income and hours). Even some contractors may be entitled to super contributions. Australia’s superannuation law is strict with regards to paying by the due date (28 days after end of every quarter). Even if you’re late by one day, you can be penalised.
- Fringe Benefit Tax (FBT) on motor vehicles. If you operate your business as a company or trust, you can claim a full deduction for expenses you incur in running a motor vehicle that your company or trust leases or owns. If you, or other company or trust employees (or their associates), use the vehicle for private purposes, you may have to pay fringe benefits tax (FBT).
- Goods taken for private use. It is a common practice in businesses such as bakers, greengrocers, convenience stores and restaurants – but business owners need to realise that accounting for goods taken out of stock for private use has tax consequences. Goods taken out of stock by a business operator for private use have to be included in the business’ income.
- Putting aside money for income tax. Unless you plan ahead for tax, it can be difficult to pay tax bills when they fall due. So it’s worth making this a priority for your business. As you become more established the Australian Taxation Office (ATO) might also require you to make quarterly pay as you go (PAYG) tax instalments.
- Getting involved in cash economy. Businesses that deliberately hide income to avoid paying the right amount of tax or superannuation are part of what is generally called the cash economy. The ATO can issue default assessments when you cannot substantiate your income or lifestyle.
Category: Small Business